Expansion No Cure For Drug Maker

From a humble beginning in a small office building in Boca Raton, Biogenix Inc. has in five years gone through an array of corporate episodes that some companies never experience in a lifetime.

Something new was always happening at Biogenix, which was founded Feb. 11, 1981, by two men long involved in the computer industry, Dr. Joseph F. Mount of Boca Raton and Harold H. Rumph of Coral Springs. At the onset, they thought they had a treatment for herpes.

For 2 1/2 years, the company pursued its chartered course, seeking to find medical applications for their anti-viral drug, which was called pepteron. Then Mount and Rumph, backed largely by a $2.1 million public stock offering in 1984, led Biogenix into a period of expensive corporate acquisitions that some former employees say destroyed the company.

In very little time, the swollen yet undercapitalized company fell prey to one calamity after another. Lawsuits and claims exceeded $2 million, operations folded and a merger with a Nevada-incorporated gold mining company was reversed because Securities and Exchange Commission rules had been violated.

More recently, creditors joined together to put Biogenix into involuntary bankruptcy, and Rumph ended his long association with Mount by ousting him as president -- at a meeting Mount did not attend -- with the help of a third director, Dr. James L. Goddard, on March 18.

Rumph said Mount was dismissed because he failed to notify the SEC of the December 1985 merger between Biogenix and Ruby Metal Mining Corp. of Inglewood, Calif. Rumph and Goddard also voted to cancel the merger.

Mount last Monday declined to comment on any aspect of the company. However, he has retained Bob Frank, a Miami attorney, to defend Biogenix against creditors in bankruptcy court. Frank, who said he only represents Biogenix in the bankruptcy proceedings, estimated that they are more than a month away.

Meanwhile, Rumph has retained a lawyer of his own choosing, Michael Gordon of West Palm Beach. Gordon said he expects to file a voluntary Chapter 11 bankruptcy petition next week so that Biogenix can manage its own reorganization.

There is still hope that Biogenix can yet become a profitable enterprise. Now working out of an office in Margate, Rumph said that a large drug manufacturer -- whom he wouldn`t identify -- is a ``couple of weeks`` away from responding to a proposal for further tests with pepteron. Rumph also said he is talking to potential investors to recapitalize the company.

In five years of almost constant transformation, Biogenix never earned a profit and by March 31, it had lost a total of $4.9 million. Investors who paid 50 cents a share in 1984 for Biogenix stock can`t even get a bid for their shares today.

At its peak on Jan. 1, 1985, Biogenix had 57 employees. In interviews, former workers described the company as a family of employees who followed Mount and Rumph from two other Boca Raton companies they controlled, Datamedix Inc. and Magenta Inc., both manufacturers of medical equipment. But as operations were pared and employees were laid off in 1985, they said they became regretful that the company didn`t have better management.

In the beginning, though, the company had a definite focus: to test and market a drug thought to be an effective treatment for diseases caused by herpes simplex viruses. In particular, Biogenix wanted to provide relief for the estimated 20 million Americans who have genital herpes -- a population that, according to Biogenix, grows by 500,000 every year.

Mount, 57, a former IBM manager and college professor, and Rumph, 55, former vice president of marketing for Harris Corp., were both familiar with the medical field by virtue of their association with Datamedix. They launched Biogenix by acquiring rights to a drug derived from cobra venom and developed by Dr. Murray Sanders, a Delray Beach research physician.

Sanders, nominated for the Nobel Prize for medicine in 1967 for getting biological activity from inert substances, had been using the drug under limited conditions to treat patients afflicted with Lou Gehrig`s disease, an incurable nerve disorder also known as amyotrophic lateral sclerosis.

A year after its founding, Biogenix received permission from the state to conduct tests on people with herpes, and although the drug produced some positive results, it never became the treatment it had been hoped to be. Instead, Biogenix researchers and unaffiliated physicians would find in late 1984 that the venom-drug promised more relief for people suffering from rheumatoid arthritis.

One of those doctors, South Miami rheumatologist Rosita Stoik, started administering the Biogenix pepteron to her worst arthritis patients one year ago in a four-week test approved by the state. She said the patients injected themselves, usually daily, and the drug reduced stiffness. One woman couldn`t move her shoulder before she was treated with the pepteron, Stoik said.